My pick: Short euro-dollar, kiwi dollar-dollar and Swiss franc-yen
Expertise: Fundamental analysis with risk management
Average time frame of trades: 1 day to 1 week
We haven’t seen a wholesale shift in risk trends, rate forecasts or stimulus directives; and therefore we have come up light on trend. Last week’s sterling-dollar short was good for a short-term drive; but little more. My short Swiss franc-yen from ¥95.25 (150-pip first target and stop) is still in place. I’m currently looking for a euro-dollar break below $1.4300 and then $1.4000 as well as kiwi dollar-dollar closing below $0.8100 for dollar swings; but there are many risk/dollar opportunities out there.
My pick: Stay long dollar-Canadian dollar
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
Last week, I entered long dollar-Canadian dollar after it pulled back to support at the bottom of a rising channel set from the 2 May low. Overall positioning has looked bullish since prices confirmed a head and shoulders bottom with a break of the formation’s neckline at Ca$0.9667. The pair shows a strong inverse correlation to the S&P 500 and I expect it to rise on risk aversion fuelled by the expiry of QE2. I am initially targeting Ca$0.9818, with a stop-loss activated on a daily close back below Ca$0.9667.
My pick: Long dollar-Swiss franc
Expertise: Technical analysis
Average time frame of trades: 4 weeks
The latest sharp drop to fresh record lows into the SFr0.8300s has been quite extreme, with the market now violently oversold and in desperate need of a major corrective rebound at a minimum. It is not too often that daily, weekly and monthly charts are oversold at the same time, and in our opinion, the very bearish price action warns that a material reversal is imminent. Position: long at SFr0.8350 for an open objective; stop only on a daily close (10pm UK time) below SFr0.8240.